Malloy seeks authority to cut city aid

Less than two weeks after his budget proposals won praise from municipal officials, Gov. Dannel Malloy is under fire for appearing to backpedal on his commitment to maintain state aid to Connecticut cities and towns.

While state aid to municipalities was largely spared from the budget cuts Malloy proposed in a major speech last Wednesday, the governor is seeking emergency authority to cancel a portion of that aid if the state’s fiscal troubles worsen. Facing a budget deficit of more than $3.6 billion, Malloy left the state’s $2.8 billion in aid to cities and towns, about 14 percent of the state budget, unchanged in his proposals. But if he has his way, he will have the authority to unilaterally cut $280 million of that assistance.

A KINK IN THE CITY’S BUDGETING

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As Mayor John DeStefano Jr. prepares to deliver his budget to the Board of Aldermen tomorrow, Malloy’s effort throws a kink into the budgeting process. The governor’s Feb. 16 speech, which called for $1.5 billion in new tax revenue and $1 billion in concessions from state employees, afforded city officials greater clarity of how dire the city’s fiscal woes are. But now that Malloy has thrown into question $280 million in municipal aid, the city’s budget estimates may need to be revised.

“It makes our budget really difficult, and it makes me a little nervous,” said Ward 29 Alderman and President of the Board of Aldermen Carl Goldfield.

In order to obtain the emergency authority he seeks, Malloy needs a change in state law.

Currently, the governor has discretion in reducing most parts of the state budget by up to 5 percent, but municipal aid is exempt from reductions without legislative approval. Malloy is now proposing to expand his power, allowing him to make midyear reductions of up to 10 percent and eliminate the municipal aid exemption.

City spokesman Adam Joseph said the prospect of a midyear rescission of state aid is just one of many variables the city will have to deal with in the budget process. Uncertainty is a part of the legislative process in general, Joseph said, adding that the budget Malloy proposed Feb. 16 may look very different by the time the state legislature approves a final budget.

Malloy’s effort to expand his budgetary authority reflects a lack of confidence that he will be able to secure the concessions from state employees he has called for, Joseph said.

RESISTANCE FROM CITIES

Malloy faces strong opposition from local governments in Connecticut that fear severe fiscal distress if their budgets are slashed midyear.

“This is not negotiable for us,” said Kevin Maloney, a spokesperson for the Connecticut Conference of Municipalities. “Any [reduction in state aid] would push the state’s budget problems onto the backs of local taxpayers.”

Malloy’s effort is surprising given his background as a city mayor, Goldfield said. Malloy, who was president of the Connecticut Conference of Municipalities while serving as mayor of Stamford, must know that reductions in state aid to cities would cause stress, Goldfield said.

Malloy was in office the last time the state rescinded municipal aid in 2003, under former Gov. John Rowland. Those cuts totaled just over $40 million, less than 15 percent of what Malloy is seeking the authority to cut.

In 2003, Goldfield said, the city was able to deal with the cuts because it was in much better fiscal health. Now, however, any cuts in state aid would be “extremely painful,” he said.

“I can appreciate why local governments can be concerned,” Benjamin Barnes, the secretary of the state’s Office of Policy and Management, told the Connecticut Mirror Wednesday. “But we believe that it is incumbent on the governor to be able to ensure every year that we live within our means.”

DeStefano submits his budget to the Board of Aldermen Tuesday morning at City Hall.